Occupations and British Wage Inequality, 1970s-2000s

Abstract

Although there was a ‘massive rise’ in British wage inequality, relatively little is known about the relationship between occupations and growing British wage inequality. Since sociologists traditionally have tended to place a great deal of emphasis on occupations, we might expect them to play a key role in accounting for trends in overall British wage inequality. More recent strands of stratification theory, however, have challenged the idea that occupations structure economic inequalities as well as they once did, and argue that the link between occupations and wages might have been weakening; instead predicting that growing wage inequality mostly occurs within occupations. We decompose trends in British wage inequality into between-occupation and within-occupation components and show that, although most wage inequality is within occupations, it is inequality between occupations that accounts for the lion's share of growing wage inequality. Trends in between-occupation inequality cannot be ‘explained away’ by fundamental labour market changes such as rising educational attainment and the decline in collective bargaining, indicating occupations really did structure the ‘massive rise’ in wage inequality. We also demonstrate what the rise in between-occupation inequality can be more or less described as growing between-class inequality.

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